This is a dated market piece. The snapshot below reflects conditions as at 27 August 2026 and will age — confirm current figures with the primary sources before relying on them.
For the past few years, many Illawarra homeowners could list a property in almost any condition and still attract strong competition. That market has shifted.
In the first half of 2026, the Reserve Bank raised the cash rate three times — in February, March and May — taking it to 4.35 per cent, where it has held since. Buyer borrowing capacity tightened, and the number of homes for sale grew (see the snapshot below). None of this means you can't achieve a strong result. It means the market is doing less of the work for you. In a rising market, momentum can lift most homes. In a softening one, buyers have more choice — and choice tends to change how they behave.
Cotality's research director Tim Lawless made this point mid-year, noting that the rise in advertised stock "should provide more choice, less urgency, and greater negotiation power for buyers" (Illawarra Mercury).
What can change when a market softens
When there are more homes for sale relative to active buyers, a few things tend to follow.
Buyers compare more. With more open homes to visit each weekend, buyers become sharper critics. A property is judged less on its own merits and more against the other homes that buyer inspected the same weekend. Small flaws that might have been overlooked in a hot market can become reasons to walk away, or to offer less.
Buyers negotiate harder. When a buyer knows there are alternatives, they feel less urgency and more leverage. A visible defect — a water stain, a tired kitchen, a cracked tile — can turn into a bargaining chip. Buyers often discount not by what a repair actually costs, but by what they fear it might cost, plus a margin for the hassle.
Homes that miss the mark can sit. Days on market can stretch, and a listing that lingers may attract the question "what's wrong with it?" The longer it sits, the more the eventual negotiation can favour the buyer. (We cover this in detail in our guide on why homes go stale.)
Why presentation can matter more now, not less
It is tempting to conclude that in a softer market there is no point spending on preparation — that the market sets the price and you simply accept it. In our experience it can work the other way.
A soft market doesn't push every home down evenly. It tends to separate homes that give buyers confidence from homes that give buyers doubts. Well-presented, move-in-ready homes are relatively scarce in any market, and can still attract competition; homes with visible doubts can absorb more of the softness.
This is where the Sale Gap comes in — the difference between what your home would likely sell for as it stands and an estimate of what it could sell for prepared. In a busier market that gap can be partly hidden, because broad demand lifts most homes. In a softening market it can become more visible, because buyers have more time and more options to weigh every unresolved doubt. (Both figures are estimates, not guaranteed prices.)
The buyer psychology behind it
Buyers don't only buy floorplans; they buy how a home makes them feel — often confidence and comfort. When a buyer sees deferred maintenance, their confidence can drop. They may start wondering what else has been neglected, whether the building report will be ugly, whether they are inheriting someone else's problems. That uncertainty tends to be priced in the buyer's favour.
A prepared home works in the opposite direction. Fresh, clean, functional and well-presented spaces remove reasons to say no. The buyer can stop auditing the property and start imagining living in it. That shift — from inspection to imagination — is often where stronger offers come from, and it can matter most when buyers are cautious.
How to respond: strategy, not panic
If you are planning to sell in the next six to twelve months, a measured response to a softening market is neither to rush to list nor to freeze. It is to prepare deliberately.
Start with an honest assessment. Before spending a dollar, understand your home's current market position: what buyers in your area are comparing it against, where the doubts are likely to arise, and where the genuine strengths sit.
Fix the confidence killers first. Repairs come before cosmetics. Anything a buyer or building inspector could read as neglect — leaks, cracks, rot, electrical or safety issues — is worth resolving before you think about styling. (Electrical, plumbing, gas and structural work must be done by appropriately licensed trades.)
Spend where buyers feel it. Not every improvement adds value, and in a tighter market discipline matters more than ambition. The aim is targeted work that changes how the home is perceived, not a renovation for its own sake.
Get the first impression right. When buyers shortlist online and compare in person, the facade, the entry and the first moments inside the door carry disproportionate weight.
The bottom line
Market conditions are outside your control. The condition and presentation of your home are largely within it. In 2026, that distinction can be the difference between a home that competes well and one that has to compromise.
Homeowners who prepare well aren't fighting the market — they're aiming to step out of the crowded part of it.
Market snapshot — as at 27 August 2026
These figures date quickly. Confirm current numbers with the primary sources before quoting them.
- Cash rate: the RBA raised the cash rate by 25 basis points at each of its February, March and May 2026 meetings, taking it to 4.35%, and held it steady at its July and August meetings. (Source: RBA.)
- Illawarra median dwelling value: reported above $1 million through mid-2026 — Cotality put the region's median at $1,073,555 in late June, having first crossed the $1 million mark in April 2025. (Source: Cotality via Illawarra Mercury.)
- Advertised stock: total advertised (unsold) stock was reported 11.5% above its decade average for that time of year in late June 2026 — a measure of accumulated listings, distinct from the flow of new listings. (Source: Cotality via Illawarra Mercury.)
- Outlook: Cotality's research director Tim Lawless noted conditions slowing, with reported forecasts that regional values could ease further in the second half of 2026. Forecasts change — treat this as a pointer to check the latest.
Sources & notes
- Reserve Bank of Australia — cash-rate decisions and history: rba.gov.au/monetary-policy/int-rate-decisions; August 2026 statement: rba.gov.au/media-releases/2026/mr-26-19.html
- ABC News — May 2026 rate rise to 4.35%: abc.net.au; August 2026 hold: abc.net.au
- Illawarra Mercury / Cotality — regional median value, stock levels and outlook (June–July 2026): Median value above $1M, but slowdown looms; Values remain above $1M, 5–10% drop forecast
- Cotality is the former CoreLogic Australia.
This article is general information only and is not financial, legal or tax advice. Market commentary reflects conditions reported as at August 2026 and will date.
UPLIFTA is a Property Sale Optimisation company based in the Illawarra, NSW. We carry out a property-preparation assessment, prepare a prioritised scope of works, and project-manage the improvements — with the cost of works deferred to settlement under your contract (eligibility and conditions apply). 1300 131 123 · info@uplifta.com.au · uplifta.com.au</result>
Curious what your home's Sale Gap is?
We measure it onsite and rank the works with indicative costs. On eligible projects the cost is deferred to settlement under your contract; eligibility and conditions apply.
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